Dow hits record high as Nasdaq falls on tech weakness and inflation data

The Nasdaq Composite fell on Thursday as investors rotated out of major technology stocks, even after a strong earnings report from Micron Technology.

The Dow Jones Industrial Average, meanwhile, hit a new intraday record, supported by gains in non-tech sectors.

The Nasdaq declined 0.46%, while the S&P 500 hovered near the flatline.

The Dow rose 72 points, or 0.1%, with healthcare, financials and industrials driving gains.

Johnson & Johnson and JPMorgan Chase advanced more than 1% and 2%, respectively, while Caterpillar jumped 5%.

Big Tech declines weigh on Nasdaq

Technology stocks led the broader weakness. Apple fell 5% after announcing price increases on MacBook and iPad products, citing rising component costs such as semiconductors.

Microsoft also declined nearly 4% after increasing prices on Xbox consoles.

Other major tech names also came under pressure. Alphabet and Meta Platforms both fell about 1%, as investors assessed potential margin pressure from higher chip costs.

Market participants noted concerns that rising semiconductor prices could ripple through the broader tech ecosystem.

Inflation data shapes Fed outlook

Fresh economic data added to market sentiment.

May’s personal consumption expenditures (PCE) index showed headline inflation rose 0.4% month-over-month and 4.1% year-over-year, both in line with expectations.

Core PCE increased 0.3% monthly and 3.4% annually, also matching forecasts.

Although core inflation reached its highest level since October 2023, investors took some comfort that the figures did not exceed expectations amid rising energy costs linked to geopolitical tensions.

Treasury yields edged lower, with the benchmark 10-year yield slipping more than 1 basis point to 4.384%.

Traders continue to anticipate at least one interest rate increase before year-end, according to LSEG data.

After four consecutive sessions of losses, West Texas Intermediate crude moved higher as geopolitical tensions in a key shipping route added to supply concerns.

A vessel was reportedly struck by an unidentified projectile in the Strait of Hormuz shortly after several commercial ships reversed course while attempting to pass through the strategic waterway.

The developments raised concerns over the stability of the corridor, potentially complicating recent signs of a reopening of the energy chokepoint.

Mixed market performance as chip stocks rally

Despite weakness in Big Tech, semiconductor stocks provided support to parts of the market.

Micron surged 14% after reporting strong fiscal third-quarter results and raising forecasts. Qualcomm gained 6% after increasing its non-handset revenue outlook for fiscal 2029.

Other chip-related names also advanced, including Sandisk, Western Digital, KLA and Applied Materials.

Among other movers, Bio-Techne Corp (TECH.O) rose after Germany’s Merck KGaA (MRCG.DE) agreed to acquire the biotech company in an all-cash deal valued at $73 per share, implying a total enterprise value of approximately $11.3 billion.

Six of the 11 major S&P 500 sectors ended higher, led by industrials, which rose 1.9%. Consumer discretionary and consumer staples lagged.

The Philadelphia Semiconductor Index rose 3.59% and is on track for its strongest quarter on record, according to LSEG data.